Enterprise Business Systems

Chapter8

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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• Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems:– Business processes supported– Customer and business value provided– Potential challenges and trends

• Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

Learning Objectives

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Managing at the Enterprise Level

• Lessons from Geese – Importance of team work – Encourage passion and energy

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Customer Relationship Management (CRM)

• Customer focused– Customer relationships – most valued asset

– Find and retain most profitable customers possible

• Company has – Single, complete view of every customer

• Customers have– Single, complete view of the company

• Integrates and automates customer-serving processes

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Contact and Account Management

• Track relevant data about– Every past and planned contact with

prospects and customers– Other business and life cycle events

• Data captured from touchpoints– Telephone, fax, e-mail– Websites, retail stores, kiosks– Personal contact

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RWC 1: CRM Goes Mobile

• Sales people

– Autonomous and don’t play by rules

– Ignore new processes unless direct benefit

• More sales

• Better time efficiency

• Designing Mobile Applications– What are the common tasks

– What are the priorities

– What are the pain points

– Less is more

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Application Clusters in CRM

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Sales

• A CRM system provides:– Support and manage sales activities– Optimize cross-selling and up-selling– Method to check account status and history

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Customer retention evaluation report

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Marketing and Fulfillment

• Automate direct marketing campaigns

– Qualifying leads for targeted marketing

– Scheduling and tracking mailings

– Capturing and managing responses

– Analyzing the business value of the campaign

– Fulfilling responses and requests

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Customer Service and Support

• Shared database

– Requests for service are created, assigned, and managed

– Call center software routes calls to agents

– Help desk software provides service data and suggestions for solving problems

• Personalized support information

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Retention and Loyalty Programs

• Statistics

– Costs 6 times more to sell to a new customer

– Unhappy customer will tell 8-10 others

– Boosting customer retention by 5 percent can boost profits by 85 percent

– Odds of selling:

• Existing customer - 50 percent

• New - 15 percent

– 70 percent of customers will do business again if problems are quickly resolved.

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• Primary objective - enhancing and optimizing customer retention and loyalty

– Identify, reward, and market to the most loyal and profitable customers

– Evaluate targeted marketing and relationship programs

Retention and Loyalty Programs

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The Three Phases of CRM

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Benefits of CRM

• Identify and target the best customers

• Real-time customization and personalization of products and services

• Track when and how a customer contacts the company

• Provide a consistent customer experience

• Provide superior service and support

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CRM Failures

• Reasons for Failure– Lack of senior management sponsorship

– Improper change management

– Elongated projects that take on too much, too fast

– Lack of or poor integration between CRM and core business systems

– Lack of end-user incentives leading to poor user adoption rates

– Lack of understanding and preparation -- # 1

– Not solving business process problems first

– No participation on part of business stakeholders involved

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Trends in CRM

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What is ERP?

• Cross-functional enterprise system – Integrated suite of software modules– Supports basic internal business processes

• Manufacturing• Logistics• Distribution• Accounting• Finance• Human resources

– Facilitates information flows• Business• Supplier• Customer

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RWC 2: ERPs Get a Second Lease on Life

• Old ERPs customized to fit individual needs

• Upgrades can’t be applied without testing and modification

• New ERPs have new features and capability

• Some companies stay with old systems

• Some companies buy new, but avoid customization

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ERP Application Components

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ERP Process and Information Flows

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Business processes and functions of ERP

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ERP at Colgate

• Needed to coordinate globally, act locally

• Order-to-delivery time cut in half

– Order acquisition and process

• 7 days cut to 4 hours

– Distribution

• 4 days cut to 14 hours

• Increased on-time deliveries

• Domestic inventories dropped by 1/3

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Costs of Implementing a New ERP

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Causes of ERP Failures

• Most common causes of ERP failure

– Under-estimating complexity

• Planning, development, training

– Failure to involve affected employees

– Too much too fast

– Insufficient training

– Insufficient data conversion and testing

– Over-reliance on ERP vendor or consultants

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Trends in ERP

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ERP application components

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Supply Chain Management (SCM)

• Helps a company– Get the right products– To the right place– At the right time– In the proper quantity– At an acceptable cost

• Goal of SCM is to efficiently…– Forecast demand– Control inventory– Enhance relationships– Receive feedback

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RWC 3: Supply Chains Adapt to Tough Times

• Old push model uses best-guess forecasts– High inventory levels– Supply chain stops during down-turn

• Key to survival in down-turn– Reduced inventory– Increased working capital

• Pull system– Information to build inventory comes from supply

chain partners– Inventory based on “demand signals”

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Supply Chain Life Cycle

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EDI Activities

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Roles and Activities of SCM in Business

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Functions and Benefits of SCM

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Benefits of SCM

• Key Benefits

– Faster, more accurate order processing

– Reductions in inventory levels

– Quicker times to market

– Lower transaction and materials costs

– Strategic relationships with supplier

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Challenges of SCM

• Key Challenges

– Lack of knowledge, tools, and guidelines

– Inaccurate data

– Lack of collaboration

– SCM tools are immature, incomplete, and hard to implement

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SCM at Emerson

• Emerson Transaction Hub– Different orders in separate containers– Created Transaction Hub (& Logistics Hub)– Combine multiple orders into single

shipments/containers

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Goals and Objectives of SCM

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Trends in SCM

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Trends in SCM

• CVS, McKesson

– CVS leading drug retail chain

– McKesson largest pharmaceutical distributor

– Point-of-sale data

– Agreed on service levels

– Reduced replenishment time

• Modern Plastics, SupplySolution, Inc.– Upraded reactive system to proactive system

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RWC 4: The Secret to CRM is in the Data

• CRM enables increased sales revenue • CRM provides more and better services to

customers and prospects. • CRM – better earlier than later.• “Without accurate, complete, and

comprehensive data, any CRM effort will be less than optimal.”